Analyzing Planet Fitness (NYSE:PLNT) and BJ’s Restaurants (NASDAQ:BJRI)

BJ’s Restaurants (NASDAQ:BJRI) and Planet Fitness (NYSE:PLNT) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Risk and Volatility

BJ’s Restaurants has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, Planet Fitness has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Profitability

This table compares BJ’s Restaurants and Planet Fitness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	2.86%	12.93%	4.79%
Planet Fitness	16.88%	-59.46%	8.60%

Analyst Ratings

This is a breakdown of recent recommendations for BJ’s Restaurants and Planet Fitness, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	1	4	4	0	2.33
Planet Fitness	1	9	11	1	2.55

BJ’s Restaurants presently has a consensus price target of $62.00, suggesting a potential upside of 8.20%. Planet Fitness has a consensus price target of $70.76, suggesting a potential upside of 17.06%. Given Planet Fitness’ stronger consensus rating and higher possible upside, analysts plainly believe Planet Fitness is more favorable than BJ’s Restaurants.

Valuation and Earnings

This table compares BJ’s Restaurants and Planet Fitness”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Restaurants	$1.43 billion	0.85	$48.81 million	$1.87	30.64
Planet Fitness	$1.32 billion	3.45	$219.10 million	$2.95	20.49

Planet Fitness has lower revenue, but higher earnings than BJ’s Restaurants. Planet Fitness is trading at a lower price-to-earnings ratio than BJ’s Restaurants, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

99.9% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 95.5% of Planet Fitness shares are held by institutional investors. 2.4% of BJ’s Restaurants shares are held by insiders. Comparatively, 0.9% of Planet Fitness shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Planet Fitness beats BJ’s Restaurants on 9 of the 15 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.

About Planet Fitness

Planet Fitness, Inc., together with its subsidiaries, franchises and operates fitness centers under the Planet Fitness brand. The company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The company is involved in franchising business in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. It engages in the sale of fitness equipment to franchisee-owned stores in the United States, Canada, and Mexico. In addition, the company operates corporate-owned stores in the United States and Canada. Planet Fitness, Inc. was founded in 1992 and is headquartered in Hampton, New Hampshire.